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Wednesday, April 10, 2013

With Budget, Obama Takes MedPAC’s Advice

by Nathaniel Weixel

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President Obama’s FY 2014 budget request would equalize Medicare payments for the same procedures performed at different sites, require a copayment for seniors using home health services, and bundle certain post-acute care services—matching many of the recommendations MedPAC has made in recent reports.

Medicare beneficiaries currently do not make co-payments for Medicare home health services. The budget proposal would create a home health
copayment of $100 per home health episode for new beneficiaries, which would apply for episodes with five or more visits not preceded by a hospital or
other inpatient post-acute care stay. MedPAC recommended a per-episode copayment in its March 2011 report to Congress, but did not specify a specific amount.

MedPAC has also found that certain common medical procedures cost more depending on where they are performed. For example, payments are significantly higher in inpatient rehabilitation facilities than skilled nursing facilities for care for hip and knee replacements, hip fractures, and certain pulmonary diseases. The budget proposes to reduce the payment differences and equalize incentives starting in 2013.

As for bundling, the budget proposes to restructure payments for post-acute care services using a bundled payment approach, which the White House estimated would save $8 billion over 10 years. MedPAC has discussed the advantages of bundling, saying it could lower Medicare spending and encourage a more efficient use of resources, but to date has not made any recommendations.
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